Disney roars in Q2 thanks to Black Panther, theme parks

The combined success of global record-breaker Black Panther and Disney's Parks and Resorts unit drove the House of Mouse's Q2 profits up 23% to US$2.9 billion.
May 9, 2018

Following mixed first quarter earnings, the House of Mouse bounced back in Q2 2018 with a 23% lift in profits, largely driven by the box office success of Black Panther and the company’s theme parks business.

Disney’s Studio Entertainment revenue for the quarter rose by 21% to US$2.5 billion, with segment operating income increasing by 29% to US$847 million. Its higher theatrical distribution results were propped up by the success of Marvel Studios’ Black Panther, which generated a whopping US$1.3 billion in global ticket sales (making it the ninth-highest grossing film in movie history).

The company attributes its studio’s operating income growth to higher theatrical, home entertainment and TV/SVOD distribution results, which were partially offset by higher film cost impairments. Its home entertainment successes were driven by strong unit sales of Star Wars: The Last Jedi on DVD and Blu-ray.

As for Disney’s Parks and Resorts segment, revenue rose by 13% to US$4.9 billion¬†and segment operating income shot up 27% to US$1 billion. The results were primarily due to higher guest spending and attendance both domestically and internationally at Walt Disney World Resort, Disneyland Paris and Hong Kong Disneyland. International increases were partially offset by a weaker performance at Shanghai Disney Resort, driven by lower attendance, cost inflation and a negative foreign currency impact.

On the downside, Disney’s television business continues to struggle amid an industry-wide decline in pay-TV viewership. Segment operating income for Disney’s Media Networks division fell by 6% to US$2.1 billion in Q2. The decline was largely due to subscriber losses at Freeform and ESPN, as well as losses at New York-based subsidiary BAMTECH, which is currently developing Disney’s SVOD and ESPN+ streaming platforms.

Meanwhile, higher losses from streaming service Hulu, in which Disney will become a majority stakeholder pending the close of its Fox acquisition, were driven by rising programming, marketing and labor costs, partially offset by growth in subscription and advertising revenue. Just last week, Hulu surpassed 20 million US subscribers and signed¬†its largest kids and family licensing deal to date—a multi-year pact with DreamWorks Animation.

Looking at Disney’s Consumer Products and Interactive Media segment, revenue increased by 2% to US$1.1 billion, while segment operating income decreased by 4% to US$354 million. Higher income from licensing activities was offset by a drop in retail store sales and an unfavorable foreign currency impact.

Disney’s overall revenue for Q2 increased by 9% to US$14.5 billion and its segment operating income rose 6% to US$4.2 billion.

Looking ahead, Disney is expecting big results in Q3, which will include the impact of Marvel’s record-breaking Avengers: Infinity War. The superhero film recently had the biggest opening weekend of all time, both domestically and globally, and surpassed US$1 billion at the global box office faster than any other movie in history. Other films expected to boost Disney’s results through 2019 include Solo: A Star Wars Story, which premieres later this month, as well as Incredibles 2, Frozen 2, Avengers 4 and Star Wars: Episode 9.

As Disney looks forward, it’s currently dealing with a wrench in its plan to acquire Fox, as US cable operator Comcast announced an all-cash bid on Monday to purchase the company. The deal would be bigger than Disney’s US$66.1-billion bid and includes a full acquisition of Britain’s Sky.

About The Author
Jeremy is the Features Editor of Kidscreen specializing in the content production, broadcasting and distribution aspects of the global children's entertainment industry. Contact Jeremy at



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